Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld X Supporting Slides Professor David K Harrison Glasgow Caledonian University Dr David J Petty The University of Manchester Institute of Science and Technology Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture ISBN

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Qualitative Analysis Quantitative Analysis Management Science Operations Research Overview

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - The Quantitative Analysis Process Implement Results Define Problem Formulate a Clear and Unambiguous Statement of the Problem Develop Model Models can take several forms Acquire Data Accurate Input Data is Essential Develop Solution Algebraic or Numerical Solution Test Solution Validation Analyse Results Implications

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Basic Rules Events Mutually Exclusive Collectively Exhaustive MECE Draw a Card Face and Number King and 7 and,, Basic Probability - Definitions 10 and 7 and Black and 1003

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Basic Probability - Law of Addition - 1 Take a Standard 52 Card Deck (No Jokers) Draw a Card and Write Down Result Replace Card Draw a Second Card and Write Down Result What are the Probabilities of Drawing:- a) A Heart or a Diamond? b) A Five or a Diamond? ??

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Adding Mutually Exclusive Events AB AB Adding Non Mutually Exclusive Events Basic Probability - Law of Addition

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Marginal or Simple Probability Joint Probability Independent Events a b Conditional Probability Then a b Basic Probability - Independence

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 30 Blue 10 Spot 20 Plain 30 Red 6 Spot 24 Plain Bayes Theorem If a red ball is drawn, what is the probability that it will have a spot? NOT Independent Statistically Dependent Events

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - H (0.5) T (0.5) TH (0.25) TT (0.25) HT (0.25) HH (0.25) HHT (0.125) HTH (0.125) HTT (0.125) THH (0.125) THT (0.125) TTH (0.125) TTT (0.125) HHH (0.125) H T H H H H H H H T H T H T H T H T H T H T H T T T T T T T HHHH (0.0625) HHHT (0.0625) HHTH (0.0625) HHTT (0.0625) HTHH (0.0625) HTHT (0.0625) HTTH (0.0625) HTTT (0.0625) THHH (0.0625) THHT (0.0625) THTH (0.0625) THTT (0.0625) TTHH (0.0625) TTHT (0.0625) TTTH (0.0625) TTTT (0.0625) Probability Trees

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Throwing Four Coins Probability P(x) Score x Throwing a Die Probability P(x) Score x Probability Distributions

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - x1x1 x2x2 M The Normal Distribution

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Statistical Formulae

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - To Provide Information To Anticipate Changes Rationale ShortLongMedium Forecasting - Overview

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Judgement Conference Survey Delphi ExtrapolationIntuitionPrediction Graphical Moving Average Exponential Smoothing Regression Multiple Regression Forecasting Forecasting Approaches

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Intuitive Forecasting Approaches 11 Judgment Conference Survey Delphi The Opinion of One Person The Collective Opinion of a group of People Collecting the Independent Opinion of Several People Combining the Conference and Survey Approaches 1103

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - JanFebMarAprMayJunJulAugSepOctNovDec DecNovOctSepAugJulJunMayAprMarFebJan 2002 Forecasting Exercise (1)

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - December 2002 Sales - Forecasting Exercise (2)

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Moving Average Exponential Smoothing Forecast for next period is the average of previous n data points Advantage Simple Analytical Extrapolation 11 n = Number of data points k = Number of points used to average x i = Data element F (i+1) = Forecast for next period.  = Smoothing factor Forecast is a weighted average (most recent is most important) of all data points Advantage Logical Only two data elements needed Move up by 1106

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Trend Exponential Smoothing

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing - 3 Seasonal

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing - 4 Combined

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing Correction “Anticipates” Changes in the Data. Also Called Trend Correction Trend Correction 11 1 st Order Smoothing 2 nd Order Smoothing 1111

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing Random 1112

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Trend Second Order Smoothing - 2 Trend

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing - 3 Seasonal

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Combined Second Order Smoothing - 4 Combined

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Regression Analysis Aftermarket Disc Brake Pads Sales + 5 Yrs vs Car Sales Now Student Attendance vs Student Marks Is There a Correlation Between Students Marks and Attendance? Is There a Correlation Between Car Sales Now and Demand for DBPs in 5 Years? 1116

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - x y (x 1, y 1 ) (x 2, y 2 ) (x 3, y 3 ) (x 4, y 4 ) (d 1 ) (d 2 ) (d 3 ) (d 4 ) y=a+bx What Line Will Minimise Total Distance? Regression Analysis a 1117

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Regression Analysis –

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Use of Regression Analysis Inside the company Inside the Industry Outside the Industry

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Perfect Positive r =+1 Positive Correlation 0 < r < 1 Perfect Negative r =-1 Negative Correlation 0 > r > -1 No Correlation Correlation Coefficients

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Multiple Regression Analysis 11 New Mark Attendance Old Mark Multiple Regression y=a+b 1 x 1 +b 2 x

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Reduce Lead Time Aggregate Forecast Improving Forecast Accuracy

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Improving Forecast Accuracy

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Essential for all Businesses Three Approaches Uncertainty is Inherent Uncertainty Must be Anticipated Forecast Accuracy can be Improved If We Make this Man Accountable for the Weather, Will it make the Sun Shine? Forecasting Summary

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - The most favourable conditions; the best compromise between opposing tendencies; the best or most favourable. Objective Functions Basic Optimisation Linear Programming Sensitivity Analysis Optimisation

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Different Objectives e.g.:Profit Cashflow Sales Strategic and Judgmental Basis for Optimisation Objective Functions

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld Simple Optimisation (1)

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Simple Optimisation (2) 12 Low Resolution Medium Resolution High Resolution 1204

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - (7.1, 6.7) Optimisation - 2 Variables

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Linear Programming (1) Linear Objective Function A Set of Linear Constraints Non-Negativity

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Optimum Point X 1. Power Limitation: 160 = 1.34X + Y Power 160 Linear Programming (2) = 1.6X Y Objective Function - Sales 3. Objective Function: Sales = 1.6X + 1.4Y Machining Capacity 2. Machining Capacity: 150 = X Y 1207

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld Power Limitation: 160 = 1.34X + Y 2. Machining Capacity: 150 = X Y X Y Machining Capacity Power 160 Linear Programming (3) 12 Lab Capacity 3. Labour Capacity: 130 = X + Y 1208

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld X Y Power Limitation: 160 = 1.34X + Y 2. Machining Capacity: 150 = X Y 3. Labour Capacity: 130 = X + Y Linear Programming (4) = 1.6X Y 196 = 1.6X Y Objective Function: Sales = 1.6X + 1.4Y Optimum Point Optimum: X= 50, Y =

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - X Y Z Y Material X Material Z Material Total Capacity Objective Function Multiple Variables

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Problems So Far Assume Perfect Information Sensitivity Analysis Determines Criticality of Base Data f(x) g(x) Sensitivity Analysis

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sales Cost Profit Different Variables May Have Different Effects Sensitivity Analysis Costs = £1000K 1212

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sensitivity Analysis –

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sensitivity Analysis – 4 Test the Sensitivity of the Model Itself Test the Sensitivity of the Model to Input Variables Can be Used for a Variety of Problems

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Optimisation Requires an Objective Function Analytical or Numerical Methods Can be Used Sensitivity Analysis Checks the Robustness of any Model Constants Parameters Optimisation Supports, not Replaces Management Summary

Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Course Book Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture Professor David K Harrison Dr David J Petty ISBN X 0000